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OPEC agrees to 1.2mbd output cut

The petroleum ministers of the Organization of the Petroleum Exporting Countries (OPEC) have agreed to cut 1.2 million barrels a day from the Organization's present output

OPEC agrees to 1.2mbd output cut
(Thursday, December 1, 2016) 00:54
The OPEC in its 171st ordinary meeting on Wednesday, November 30, reached the agreement for the first ever since 2008 to decrease its production, hence being able to implement the Algiers accord of September 28.
Based on the Algiers accord, the Organization was to minimize the production level to 32.5 million barrels per day to 33 million barrels per day.
Per the Vienna decision, OPEC will for a period of six months cut the output by 1.2 million barrels per day as of the beginning of 2017, thus bringing the production ceiling to 32.5 million barrels per day. This will depend on cooperation of the non-OPEC states and daily cut of 600,000 barrels per day from their production.
According to Shana, OPEC ministers of petroleum and energy also agreed to Iran's daily production of 3.9 million barrels per day.
The minus politicized OPEC decision proves that under difficult conditions important decisions still can be made and play a major role in the world energy market.
Predictions show that following the OPEC decision, oil price will reach 50 to 55 dollars a barrel.
Minister of Petroleum Bijan Zangeneh had prior to the OPEC session announced, 'If economic spirit governs the meeting of the oil and energy ministers of OPEC, we will reach decision very soon; however, if politics are to be involved, the decision making will be times very difficult.'
Per OPEC agreement on Wednesday, Saudi Arabia will cut its production by 500,000 barrels per day to the level of 10.6 million barrels per day.
Reuters puts Saudis' output in October at 10.549 million barrels per day.
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